There is no inevitable negative effect of immigration on the quality of people’s lives in the UK

Many people think that migrants take jobs away from citizens, reduce wages or both. Others argue that immigrants benefit the economy because they take risks and start businesses. In three short videos below Alan Manning explains how migration affects your job prospects, presents the data from the UK and the world, and gives insights on managing migration in light of this evidence. Ultimately, he argues that there is no inevitable negative effect of immigration on the quality of people’s lives in the UK.

Alan Manning is Professor of Economics in the Department of Economics and Director of the Community Programme at the Centre for Economic Performance at LSE. His research generally covers labour markets, with a focus on imperfect competition (monopsony), minimum wages, job polarisation, immigration, and gender. On immigration, his interests expand beyond the economy to issues such as social housing, minority groups, and identity. Alan holds a DPhil in Economics from Oxford University. For more on Alan’s work, visit his personal website.

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Assuming immigrants are more likely to work than normal citizens (which is true as more of them are 16-64) and assuming they’re less likely to consume than British workers too (due to remittances etc.), this would weaken the demand for workers (assuming the same monetary conditions) but also could weaken consumption per capita – or per worker – in the economy. This would mean, all else equal, that a looser monetary policy would be required to prevent oversupply and maintain stable inflation and growth.

Weaker monetary policy, especially since 2008, increases inequality by boosting asset prices more than wages. It also may not be possible if it pushes the Wicksellian equilibrium below zero like in 2008 which has huge economic consequences which leads to higher unemployment and a recession.

It could also lead businesses to deter investment in productivity enhancing technologies if they have a huge surplus of workers. This means there is no increase in unemployment, but worker productivity remains stagnant. This could seriously harm long-term growth prospects and is a huge issue in most developed economies right now.

Also, completely ignoring wages, which are sticky and consequently they’re very unlikely to actually fall significantly in the event of high immigration, has there not been any studies of the effect of immigration on workers’ rights? In a world of zero-hour contracts and businesses seriously cutting down on worker benefits, is that not an obvious thing to study? After all, economic models don’t model wages, they model the marginal cost of labour, which incorporates far more than take home wages that businesses can cut before they cut wages.

I’m not necessarily saying any of this is true as this is way above my academic level, I’m just saying there may be more to it than you think.

Which is utterly ridiculous. We went through this with Indian and Pakistani immigrants in the Seventies, we went through it with the Jamaicans in the Fifties, we went through it with the Irish at the turn of the previous century… Strangely enough, nothing particularly awful seems to have happened as a result of any of them becoming a fixture.